##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003
ORo TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number 000-31511

---

AT ROAD, INC.
(Exact name of registrant as specified in its charter)

|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 94-3209170         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

47200 Bayside Parkway
Fremont, CA 94538
(Address of principal executive offices, including zip code)

510-668-1638
(Registrants telephone number, including area code)

---

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes x No o

As of May 2, 2003 there were 48,055,125 shares of the registrants Common
Stock outstanding.





---

TABLE OF CONTENTS



|                              |                                                                                                |                                                                                                                                                           |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements.                                                                 
|                              |                                                                                                | Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002.                                                                        
|                              |                                                                                                | Condensed Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002.                                                      
|                              |                                                                                                | Condensed Consolidated Statements of Stockholders Equity for the three months ended March 31, 2003 and 2002 and the nine months ended December 31, 2002.
|                              |                                                                                                | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002.                                                      
|                              |                                                                                                | Notes to Condensed Consolidated Financial Statements.                                                                                                    
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk.                           
|                              | Item 4. Controls and Procedures.                                                              
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings.                                                                    
|                              | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|                              | Item 6. Exhibits and Reports on Form 8-K.                                                     
|EXHIBIT 99.1                 
|EXHIBIT 99.2                 



---



##### Table of Contents



INDEX

|         |  |                       |  |                                                                                                                                                           |   
|-------- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|PART I.  |  | FINANCIAL INFORMATION | 
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 1.               |  | Financial Statements.                                                                                                                                     |   
|        
|         |  |                       |  | Condensed Consolidated Balance Sheets as of March 31, 2003 and
December 31, 2002.                                                                         | 3 
|         |  |                       |  |                                                                                                                                                           |   
|         |  |                       |  | Condensed Consolidated Statements of Operations for the three months
ended March 31, 2003 and 2002.                                                       | 4 
|         |  |                       |  |                                                                                                                                                           |   
|         |  |                       |  | Condensed Consolidated Statements of Stockholders Equity for the
three months ended March 31, 2003 and 2002 and the nine months
ended December 31, 2002. | 5 
|         |  |                       |  |                                                                                                                                                           |   
|         |  |                       |  | Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 2003 and 2002.                                                       | 6 
|         |  |                       |  |                                                                                                                                                           |   
|         |  |                       |  | Notes to Condensed Consolidated Financial Statements.                                                                                                     | 7 
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations.                                                                    | 11
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures About Market Risk.                                                                                               | 31
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 4.               |  | Controls and Procedures.                                                                                                                                  | 32
|         |  |                       |  |                                                                                                                                                           |   
|PART II. |  | OTHER INFORMATION    
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 1.               |  | Legal Proceedings.                                                                                                                                        | 32
|         |  |                       |  |                                                                                                                                                          
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders.                                                                                                      | 33
|         |  |                       |  |                                                                                                                                                           |   
|         |  | Item 6.               |  | Exhibits and Reports on Form 8-K.                                                                                                                         | 33

2



---



##### Table of Contents









|     |  |    |  |                      
|---- |  | -- |  | ---------------------
|PART |  | I. |  | FINANCIAL INFORMATION
|     |  |    |  |                      
|Item |  | 1. |  | Financial
Statements.




At Road, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and par value amounts)
(unaudited)

|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |        |              |        | 
|---------------------------------------------------- | ----------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ------- | --------- | -------- | ------ | ------------ | ------ | 
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         | March 31, |          |        | December 31,
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         | 2003      |          |        |              | 2002   | 
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |        |             
|ASSETS                                               |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |       
|Current assets:                                      |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |       
|                                                     | Cash and cash equivalents                       |                                                                                                                                                                 | $                                          | 36,988 |         |           | $        | 35,659 |             
|                                                     | Restricted short-term investments               |                                                                                                                                                                 |                                            | 2,245  |         |           |          | 2,241  |             
|                                                     | Accounts receivable, net                        |                                                                                                                                                                 |                                            | 6,563  |         |           |          | 7,407  |             
|                                                     | Inventories                                     |                                                                                                                                                                 |                                            | 4,746  |         |           |          | 5,399  |             
|                                                     | Deferred product costs and other current assets |                                                                                                                                                                 |                                            | 10,869 |         |           |          | 9,937  |             
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total current assets                       |        |         | 61,411    |          |        |              | 60,643 | 
|Property and equipment, net                          |                                                 |                                                                                                                                                                 | 1,882                                      |        |         |           | 2,500    |       
|Deferred product costs, intangibles and other assets |                                                 |                                                                                                                                                                 | 7,820                                      |        |         |           | 7,407    |       
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total assets                               |        | $       | 71,113    |          |        | $            | 70,550 | 
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |           |         
|LIABILITIES AND STOCKHOLDERS EQUITY                 |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |       
|Current liabilities:                                 |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |       
|                                                     | Accounts payable                                |                                                                                                                                                                 | $                                          | 3,705  |         |           | $        | 3,408  |             
|                                                     | Accrued liabilities                             |                                                                                                                                                                 |                                            | 3,380  |         |           |          | 3,870  |             
|                                                     | Deferred revenue and customer deposits          |                                                                                                                                                                 |                                            | 8,832  |         |           |          | 7,594  |             
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total current liabilities                  |        |         | 15,917    |          |        |              | 14,872 | 
|Deferred revenue                                     |                                                 |                                                                                                                                                                 | 5,697                                      |        |         |           | 5,321    |       
|Other long-term liabilities                          |                                                 |                                                                                                                                                                 | 154                                        |        |         |           | 190      |       
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total liabilities                          |        |         | 21,768    |          |        |              | 20,383 | 
|Stockholders equity:                                |                                                 |                                                                                                                                                                 |                                            |        |         |           |          |       
|                                                     |                                                 | Preferred stock, $0.0001 par value, 10,000,000 shares authorized,
shares issued and outstanding: none at March 31, 2003 and
December 31, 2002                   |                                            |        |        |           |          |        |             |       
|                                                     |                                                 | Common stock, $0.0001 par value, 250,000,000 shares authorized,
shares issued and outstanding: 47,950,588 at March 31, 2003 and
47,747,156 at December 31, 2002 |                                            |        | 170,868 |           |          |        | 170,610      |       
|Deferred stock compensation                          |                                                 |                                                                                                                                                                 | (294                                       | )      |         |           | (491     | )     
|Notes receivable from stockholders                   |                                                 |                                                                                                                                                                 | (2,042                                     | )      |         |           | (2,068   | )     
|Accumulated deficit                                  |                                                 |                                                                                                                                                                 | (119,187                                   | )      |         |           | (117,884 | )     
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total stockholders equity                 |        |         | 49,345    |          |        |              | 50,167 | 
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |          
|                                                     |                                                 |                                                                                                                                                                 | Total liabilities and stockholders equity |        | $       | 71,113    |          |        | $            | 70,550 | 
|                                                     |                                                 |                                                                                                                                                                 |                                            |        |         |           |         

See notes to condensed consolidated financial statements.

3



---



##### Table of Contents






At Road, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)

|                                                                |                             |                                   |                            |        |        |                    |        |       |        |     |    | 
|--------------------------------------------------------------- | --------------------------- | --------------------------------- | -------------------------- | ------ | ------ | ------------------ | ------ | ----- | ------ | --- | -- | 
|                                                                |                             |                                   |                            |        |        | Three months ended |       
|                                                                |                             |                                   |                            |        |        | March 31,          |       
|                                                                |                             |                                   |                            |        |        |                    |       
|                                                                |                             |                                   |                            |        |        | 2003               |        |       | 2002   |    
|                                                                |                             |                                   |                            |        |        |                    |        |       |        |    
|Revenues:                                                       |                             |                                   |                            |        |        |                    |        |      
|                                                                | Service                     |                                   | $                          | 10,603 |        |                    | $      | 7,251 |       
|                                                                | Product                     |                                   |                            | 3,138  |        |                    |        | 2,449 |       
|                                                                |                             |                                   |                            |        |        |                   
|                                                                |                             | Total revenues                    |                            |        | 13,741 |                    |        |       | 9,700  |    
|                                                                |                             |                                   |                            |        |        |                   
|Costs and expenses:                                             |                             |                                   |                            |        |        |                    |        |      
|                                                                | Cost of service revenue     |                                   |                            | 3,792  |        |                    |        | 3,209 |       
|                                                                | Cost of product revenue     |                                   |                            | 4,637  |        |                    |        | 3,954 |       
|                                                                | Sales and marketing         |                                   |                            | 2,597  |        |                    |        | 2,998 |       
|                                                                | Research and development    |                                   |                            | 1,336  |        |                    |        | 1,586 |       
|                                                                | General and administrative  |                                   |                            | 2,218  |        |                    |        | 2,933 |       
|                                                                | Intangibles amortization    |                                   |                            | 424    |        |                    |        | 414   |       
|                                                                | Stock compensation(*)       |                                   |                            | 192    |        |                    |        | 61    |       
|                                                                |                             |                                   |                            |        |        |                   
|                                                                |                             | Total costs and expenses          |                            |        | 15,196 |                    |        |       | 15,155 |    
|                                                                |                             |                                   |                            |        |        |                   
|Loss from operations                                            |                             |                                   | (1,455                     | )      |        |                    | (5,455 | )    
|Other income (expense), net:                                    |                             |                                   |                            |        |        |                    |        |      
|                                                                | Interest income, net        |                                   |                            | 148    |        |                    |        | 239   |       
|                                                                | Other income (expense), net |                                   |                            | 4      |        |                    |        | 6     |       
|                                                                |                             |                                   |                            |        |        |                   
|                                                                |                             | Total other income (expense), net |                            |        | 152    |                    |        |       | 245    |    
|                                                                |                             |                                   |                            |        |        |                   
|Net loss                                                        |                             | $                                 | (1,303                     | )      |        | $                  | (5,210 | )    
|                                                                |                             |                                   |                            |        |        |                    |       
|Basic and diluted net loss per share                            |                             | $                                 | (0.03                      | )      |        | $                  | (0.12  | )    
|                                                                |                             |                                   |                            |        |        |                   
|Shares used in calculating basic and diluted net loss per share |                             |                                   | 47,577                     |        |        |                    | 45,287 |      
|                                                                |                             |                                   |                            |        |        |                   
|(*)Stock compensation:                                          |                             |                                   |                            |        |        |                    |        |      
|                                                                |                             |                                   | Cost of service revenue    |        | $      | 5                  |        |       | $      | 2   |   
|                                                                |                             |                                   | Cost of product revenue    |        |        | 10                 |        |       |        | 31  |   
|                                                                |                             |                                   | Sales and marketing        |        |        | 5                  |        |       |        | 17  |   
|                                                                |                             |                                   | Research and development   |        |        | 35                 |        |       |        | 104 |   
|                                                                |                             |                                   | General and administrative |        |        | 137                |        |       |        | (93 | ) 
|                                                                |                             |                                   |                            |        |        |                   
|                                                                |                             |                                   |                            | Total  |        | $                  | 192    |       |        | $   | 61 | 
|                                                                |                             |                                   |                            |        |        |                    |       

See notes to condensed consolidated financial statements.

4



---



##### Table of Contents






At Road, Inc.
Condensed Consolidated Statements of Stockholders
Equity
For the three months ended March 31, 2003 and 2002
and the nine months ended December 31, 2002
(In thousands, except share amounts)
(unaudited)

|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |   |          |   |  |   |        |  
|-------------------------------------------------------------------- |  | ------------ | ---------- | - | -------- | - | ------- | ------------ |  | - | ------------ | - |  | ------------- | ------ | - | ------ | - | -------- | - |  | - | ------ | -
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  | Notes         |        |   |        |   |          |   |  |   |       
|                                                                     |  | Common Stock |            |   | Deferred |   |         | Receivable   |  |   | Accumu-      |   |  |               |        |  
|                                                                     |  |              |            |   | Stock    |   |         | From         |  |   | lated        |   |  | Stockholders |       
|                                                                     |  | Shares       |            |   | Amount   |   |         | Compensation |  |   | Stockholders |   |  | Deficit       |        |   | Equity |  
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |  
|BALANCES, January 1, 2002                                            |  |              | 46,499,451 |   |          | $ | 169,148 |              |  | $ | (2,342       | ) |  | $             | (2,748 | ) |        | $ | (103,647 | ) |  | $ | 60,411 |  
|Net loss                                                             |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |   | (5,210   | ) |  |   | (5,210 | )
|Exercise of stock options                                            |  |              | 306,559    |   |          |   | 412     |              |  |   |              |   |  |               |        |   |        |   |          |   |  |   | 412    |  
|Collection of notes receivable
from stockholders                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               | 185    |   |        |   |          |   |  |   | 185    |  
|Repurchase of common stock
through cancellation of notes
receivable  |  |              | (93,750    | ) |          |   | (126    | )            |  |   |              |   |  |               | 126    |   |        |   |          |   |  |   |        |  
|Deferred stock compensation                                          |  |              |            |   |          |   | 52      |              |  |   | (52          | ) |  |               |        |   |        |   |          |   |  |   |        |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |   |          |   | (739    | )            |  |   | 739          |   |  |               |        |   |        |   |          |   |  |   |        |  
|Amortization of deferred stock
compensation                          |  |              |           |   |          |   |        |              |  |   | 61           |   |  |               |       |   |        |   |         |   |  |   | 61     |  
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |  
|BALANCES, March 31, 2002                                             |  |              | 46,712,260 |   |          |   | 168,747 |              |  |   | (1,594       | ) |  |               | (2,437 | ) |        |   | (108,857 | ) |  |   | 55,859 |  
|Net loss                                                             |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |   | (9,027   | ) |  |   | (9,027 | )
|Shares issued under employee
stock
purchase plan                     |  |              | 555,651    |   |          |   | 1,098   |              |  |   |              |   |  |               |        |   |        |   |          |   |  |   | 1,098  |  
|Exercise of stock options                                            |  |              | 479,245    |   |          |   | 864     |              |  |   |              |   |  |               | 369    |   |        |   |          |   |  |   | 1,233  |  
|Deferred stock compensation                                          |  |              |            |   |          |   | (37     | )            |  |   | 37           |   |  |               |        |   |        |   |          |   |  |   |        |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |   |          |   | (62     | )            |  |   | 62           |   |  |               |        |   |        |   |          |   |  |   |        |  
|Amortization of deferred stock
compensation                          |  |              |           |   |          |   |        |              |  |   | 1,004        |   |  |               |       |   |        |   |         |   |  |   | 1,004  |  
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |  
|BALANCES, December 31, 2002                                          |  |              | 47,747,156 |   |          |   | 170,610 |              |  |   | (491         | ) |  |               | (2,068 | ) |        |   | (117,884 | ) |  |   | 50,167 |  
|Net loss                                                             |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |   | (1,303   | ) |  |   | (1,303 | )
|Exercise of stock options                                            |  |              | 203,432    |   |          |   | 263     |              |  |   |              |   |  |               |        |   |        |   |          |   |  |   | 263    |  
|Collection of notes receivable
from stockholders                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               | 26     |   |        |   |          |   |  |   | 26     |  
|Deferred stock compensation                                          |  |              |            |   |          |   | 5       |              |  |   | (5           | ) |  |               |        |   |        |   |          |   |  |   |        |  
|Reversal of deferred stock
compensation due to employee
terminations |  |              |            |   |          |   | (10     | )            |  |   | 10           |   |  |               |        |   |        |   |          |   |  |   |        |  
|Amortization of deferred stock
compensation                          |  |              |           |   |          |   |        |              |  |   | 192          |   |  |               |       |   |        |   |         |   |  |   | 192    |  
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |  
|BALANCES, March 31, 2003                                             |  |              | 47,950,588 |   |          | $ | 170,868 |              |  | $ | (294         | ) |  | $             | (2,042 | ) |        | $ | (119,187 | ) |  | $ | 49,345 |  
|                                                                     |  |              |            |   |          |   |         |              |  |   |              |   |  |               |        |   |        |  

Total comprehensive loss for the three months ended March 31, 2003, and
2002 and the nine months ended December 31, 2002 is equal to the
net loss in each respective period.

See notes to condensed consolidated financial statements.

5



---



##### Table of Contents






At Road, Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)

|                                                     |                                                                                           |                                             |                                        |                                                     |       |                    |        |        |       |        |        |  
|---------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------------------------- | -------------------------------------- | --------------------------------------------------- | ----- | ------------------ | ------ | ------ | ----- | ------ | ------ | -
|                                                     |                                                                                           |                                             |                                        |                                                     |       | Three months ended |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       | March 31,          |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                    |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       | 2003               |        |        | 2002  |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                    |        |        |       |       
|Cash flows from operating activities:                |                                                                                           |                                             |                                        |                                                     |       |                    |        |       
|                                                     | Net loss                                                                                  |                                             | $                                      | (1,303                                              | )     |                    | $      | (5,210 | )    
|                                                     | Adjustments
to reconcile net loss to net cash provided by (used in) operating activities: |                                             |                                        |                                                     |       |                    |        |        |      
|                                                     |                                                                                           | Depreciation and amortization               |                                        |                                                     | 1,142 |                    |        |        | 1,177 |       
|                                                     |                                                                                           | Loss on disposal of property and equipment  |                                        |                                                     | 4     |                    |        |        |      |       
|                                                     |                                                                                           | Amortization of deferred stock compensation |                                        |                                                     | 192   |                    |        |        | 61    |       
|                                                     |                                                                                           | Provision for inventory reserves            |                                        |                                                     | 60    |                    |        |        | 198   |       
|                                                     |                                                                                           | Provision for bad debts and sales returns   |                                        |                                                     | 43    |                    |        |        | 718   |       
|                                                     |                                                                                           | Change in assets and liabilities            |                                        |                                                     |       |                    |        |        |       |       
|                                                     |                                                                                           |                                             | Accounts receivable                    |                                                     |       | 801                |        |        |       | (1,081 | )     
|                                                     |                                                                                           |                                             | Inventories                            |                                                     |       | 593                |        |        |       | 15     |       
|                                                     |                                                                                           |                                             | Deferred product costs                 |                                                     |       | (1,762             | )      |        |       | 238    |       
|                                                     |                                                                                           |                                             | Prepaid expenses and other             |                                                     |       | 21                 |        |        |       | (99    | )     
|                                                     |                                                                                           |                                             | Accounts payable                       |                                                     |       | 297                |        |        |       | 88     |       
|                                                     |                                                                                           |                                             | Accrued and other liabilities          |                                                     |       | (526               | )      |        |       | 255    |       
|                                                     |                                                                                           |                                             | Deferred revenue and customer deposits |                                                     |       | 1,614              |        |        |       | 107    |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|                                                     |                                                                                           |                                             |                                        | Net cash provided by (used in) operating activities |       |                    | 1,176  |        |       |        | (3,533 | )
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|Cash flows from investing activities:                |                                                                                           |                                             |                                        |                                                     |       |                    |        |       
|                                                     | Purchase of property and equipment                                                        |                                             |                                        | (104                                                | )     |                    |        | (195   | )    
|                                                     | Purchase of restricted short-term investments                                             |                                             |                                        | (4                                                  | )     |                    |        | (6     | )    
|                                                     | Other assets                                                                              |                                             |                                        | (28                                                 | )     |                    |        | (9     | )    
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|                                                     |                                                                                           |                                             |                                        | Net cash used in investing activities               |       |                    | (136   | )      |       |        | (210   | )
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|Cash flows from financing activities:                |                                                                                           |                                             |                                        |                                                     |       |                    |        |       
|                                                     | Proceeds from sale of common stock                                                        |                                             |                                        | 263                                                 |       |                    |        | 412    |      
|                                                     | Proceeds from payments on notes receivable issued to stockholders                         |                                             |                                        | 26                                                  |       |                    |        | 185    |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|Net cash provided by financing activities            |                                                                                           |                                             | 289                                    |                                                     |       |                    | 597    |       
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|Net increase (decrease) in cash and cash equivalents |                                                                                           |                                             | 1,329                                  |                                                     |       |                    | (3,146 | )     
|Cash and cash equivalents:                           |                                                                                           |                                             |                                        |                                                     |       |                    |        |       
|                                                     | Beginning of period                                                                       |                                             |                                        | 35,659                                              |       |                    |        | 40,164 |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|                                                     | End of period                                                                             |                                             | $                                      | 36,988                                              |       |                    | $      | 37,018 |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|Non-cash investing and financing activities:         |                                                                                           |                                             |                                        |                                                     |       |                    |        |       
|                                                     | Deferred stock compensation                                                               |                                             | $                                      | 5                                                   |       |                    | $      | 52     |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|                                                     | Reversal of deferred stock compensation                                                   |                                             | $                                      | 10                                                  |       |                    | $      | 739    |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   
|                                                     | Repurchase of common stock through cancellation of notes receivable                       |                                             | $                                      |                                                    |       |                    | $      | 126    |      
|                                                     |                                                                                           |                                             |                                        |                                                     |       |                   

See notes to condensed consolidated financial statements.

6



---



##### Table of Contents






Notes To Condensed Consolidated Financial Statements
(Unaudited)

Note 1  Basis of Presentation

The accompanying condensed consolidated financial statements were prepared
by At Road, Inc., without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures which are made are adequate to make the
information presented not misleading. In the opinion of management, the
financial statements include all adjustments necessary to fairly present the
financial condition, results of operations, and cash flows for such periods.
Results of operations for the periods presented are not necessarily indicative
of results for any other interim period or for the full year. These financial
statements should be read in conjunction with the Companys consolidated and
audited financial statements and notes thereto in its Form 10-K (No.
000-31511), filed on March 31, 2003 with the SEC.

Certain reclassifications have been made to the
2002 financial statements to conform to the 2003 presentation. These
reclassifications had no effect on net loss or
stockholders
equity.

Note 2  Basic and Diluted Net Loss Per Share

Basic and diluted net loss per share is computed by dividing the loss
attributable to common stockholders by the weighted average number of shares of
common stock outstanding for the period (excluding shares subject to
repurchase). Diluted loss per common share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Common share equivalents are
excluded from the computation in loss periods, as their effect would be
antidilutive.

The following is a reconciliation of the denominators used in calculating
basic and diluted net loss per share (in thousands):

|                                                                 |  |                    |        |   |      |  |        |  
|---------------------------------------------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | -
|                                                                 |  | Three months ended |       
|                                                                 |  | March 31,          |       
|                                                                 |  |                    |       
|                                                                 |  | 2003               |        |   | 2002 | 
|                                                                 |  |                    |        |   |      | 
|Weighted average common shares outstanding                       |  |                    | 47,876 |   |      |  | 46,607 |  
|Weighted average common shares outstanding subject to repurchase |  |                    | (299   | ) |      |  | (1,320 | )
|                                                                 |  |                    |        |   |      | 
|Shares used in computation, basic and diluted                    |  |                    | 47,577 |   |      |  | 45,287 |  
|                                                                 |  |                    |        |   |      | 

The total number of options and restricted stock subject to repurchase
excluded from the diluted net loss per share computation for the three months
ended March 31, 2003 and 2002 were as follows (in thousands):

7



---



##### Table of Contents



|                                             |  |                    |       |  |      |  |       | 
|-------------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | 
|                                             |  | Three months ended |      
|                                             |  | March 31,          |      
|                                             |  |                    |      
|                                             |  | 2003               |       |  | 2002 | 
|                                             |  |                    |       |  |      | 
|Shares of common stock subject to repurchase |  |                    | 209   |  |      |  | 1,152 | 
|Outstanding options                          |  |                    | 8,018 |  |      |  | 6,616 | 

Note 3  Balance Sheet Items

Inventories consist of raw materials, work in process and finished goods,
and are stated at the lower of cost (average cost) or market and consist of the
following (in thousands):

|                |  |           |       |  |              |   |       | 
|--------------- |  | --------- | ----- |  | ------------ | - | ----- | 
|                |  | March 31, |       |  | December 31, |  
|                |  | 2003      |       |  | 2002         |  
|                |  |           |       |  |              |  
|Raw materials   |  | $         | 2,675 |  |              | $ | 3,183 | 
|Work in process |  |           | 293   |  |              |   | 389   | 
|Finished goods  |  |           | 1,778 |  |              |   | 1,827 | 
|                |  |           |       |  |              |  
|Total           |  | $         | 4,746 |  |              | $ | 5,399 | 
|                |  |           |       |  |              |  

Deferred product costs and other current assets consist of the following
(in thousands):

|                               |  |           |        |  |              |   |       | 
|------------------------------ |  | --------- | ------ |  | ------------ | - | ----- | 
|                               |  | March 31, |        |  | December 31, |  
|                               |  | 2003      |        |  | 2002         |  
|                               |  |           |        |  |              |  
|Current deferred product costs |  | $         | 9,647  |  |              | $ | 8,694 | 
|Prepaid expenses and other     |  |           | 1,222  |  |              |   | 1,243 | 
|                               |  |           |        |  |              |  
|Total                          |  | $         | 10,869 |  |              | $ | 9,937 | 
|                               |  |           |        |  |              |  

Deferred product costs, intangibles, and other assets consist of the
following (in thousands):

|                                   |  |           |       |  |              |   |       | 
|---------------------------------- |  | --------- | ----- |  | ------------ | - | ----- | 
|                                   |  | March 31, |       |  | December 31, |  
|                                   |  | 2003      |       |  | 2002         |  
|                                   |  |           |       |  |              |  
|Purchased technology               |  | $         | 59    |  |              | $ | 483   | 
|Non-current deferred product costs |  |           | 6,975 |  |              |   | 6,166 | 
|Other                              |  |           | 786   |  |              |   | 758   | 
|                                   |  |           |       |  |              |  
|Total                              |  | $         | 7,820 |  |              | $ | 7,407 | 
|                                   |  |           |       |  |              |  

Deferred revenue and customer deposits consist of the following (in
thousands):

|                  |  |           |       |  |              |   |       | 
|----------------- |  | --------- | ----- |  | ------------ | - | ----- | 
|                  |  | March 31, |       |  | December 31, |  
|                  |  | 2003      |       |  | 2002         |  
|                  |  |           |       |  |              |  
|Deferred revenue  |  | $         | 7,395 |  |              | $ | 7,155 | 
|Customer deposits |  |           | 1,437 |  |              |   | 439   | 
|                  |  |           |       |  |              |  
|Total             |  | $         | 8,832 |  |              | $ | 7,594 | 
|                  |  |           |       |  |              |  

8



---



##### Table of Contents



Note 4  Stock-Based Awards

The Company accounts for stock-based awards to employees using the
intrinsic value method in accordance with Accounting Principles Board Opinion
(APB) No. 25, Accounting for Stock Issued to Employees, and its related
interpretations. Accordingly, no compensation expense has been recognized in
the financial statements for employee stock arrangements granted at fair market
value.

The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, and Emerging Issues
Task Force (EITF) Issue No. 96-18, Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services, which requires that the fair value of such instruments be
recognized as an expense over the period in which the related services are
received.

SFAS No. 123 requires the disclosure of pro forma net income or loss had
the Company adopted the fair value method. Under SFAS No. 123, the fair value
of stock-based awards to employees is calculated through the use of option
pricing models, even though such models were developed to estimate the fair
value of freely tradable, fully transferable options without vesting
restrictions, which significantly differ from the Companys stock option
awards. These models also require subjective assumptions, including expected
time to exercise, which greatly affect the calculated values. The Companys
calculations are based on a single option valuation approach, and forfeitures
are recognized as they occur. The Company used the following weighted average
assumptions:

|                    |                         |  |                      |       |   |      |   |       |  
|------------------- | ----------------------- |  | -------------------- | ----- | - | ---- | - | ----- | -
|                    |                         |  | For the Three Months |      
|                    |                         |  | Ended March 31,      |      
|                    |                         |  |                      |      
|                    |                         |  | 2003                 |       |   | 2002 |  
|                    |                         |  |                      |       |   |      |  
|Stock Option Plans: |                         |  |                      |       |   |      |   |      
|                    | Risk free interest rate |  |                      | 2.78  | % |      |   | 3.6   | %
|                    | Expected volatility     |  |                      | 119.0 | % |      |   | 124.0 | %
|                    | Expect life (in years)  |  |                      | 5     |   |      |   | 5     |  
|                    | Expected dividend       |  | $                    | 0.00  |   |      | $ | 0.00  |  

If the computed minimum values of the Companys stock-based awards to
employees had been amortized to expense over the vesting period of the awards
as specified under SFAS No. 123, loss attributable to common stockholders and
basic and diluted loss per share on a pro forma basis (as compared to such
items as reported) would have been (in thousands, except per share amounts):

|                                                                                        |             |   |                                      |       |   |      |        |       |  
|--------------------------------------------------------------------------------------- | ----------- | - | ------------------------------------ | ----- | - | ---- | ------ | ----- | -
|                                                                                        |             |   | For the Three Months Ended March 31, |      
|                                                                                        |             |   |                                      |      
|                                                                                        |             |   | 2003                                 |       |   | 2002 |       
|                                                                                        |             |   |                                      |       |   |      |       
|Net loss as reported                                                                    |             | $ | (1,303                               | )     |   | $    | (5,210 | )    
|Less: stock-based employee compensation
expense included in reported net loss           |             |   | 186                                  |       |   |      | 11     |      
|Add: stock-based employee compensation
expense determined under fair value based
method |             |   | (1,792                               | )     |   |      | (1,642 | )    
|                                                                                        |             |   |                                      |       |   |     
|Pro forma net loss                                                                      |             | $ | (2,909                               | )     |   | $    | (6,841 | )    
|                                                                                        |             |   |                                      |       |   |     
|Basic and diluted net loss per share:                                                   |             |   |                                      |       |   |      |        |      
|                                                                                        | As reported |   | $                                    | (0.03 | ) |      | $      | (0.12 | )
|                                                                                        |             |   |                                      |       |   |     
|                                                                                        | Pro forma   |   | $                                    | (0.06 | ) |      | $      | (0.15 | )
|                                                                                        |             |   |                                      |       |   |     

9



---



##### Table of Contents



Notes 5  Intangible Assets

On January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other
Intangible Assets. As the Company does not have any goodwill, only specifically identifiable intangible
assets are assessed.

In October 2002, the Company completed the acquisition of an additional
$83,000 of purchased technology. This intangible asset is being amortized on a
straight-line basis over an estimated useful life of two years.

Information regarding the Companys intangible assets is as follows (in
thousands):

|                     |  |                   |       |  |                      |   |        |     |  |   |        |          |  |              |             |  |     |   |        |   |  |   |     | 
|-------------------- |  | ----------------- | ----- |  | -------------------- | - | ------ | --- |  | - | ------ | -------- |  | ------------ | ----------- |  | --- | - | ------ | - |  | - | --- | 
|                     |  | At March 31, 2003 |       |  | At December 31, 2002 |  
|                     |  |                   |       |  |                      |  
|                     |  | Carrying          |       |  | Accumulated          |   |        |     |  |   |        | Carrying |  |              | Accumulated |  |     |   |        |  
|                     |  | Amount            |       |  | Depreciation         |   |        | Net |  |   | Amount |          |  | Depreciation |             |  | Net |  
|                     |  |                   |       |  |                      |   |        |     |  |   |        |          |  |              |             |  |     |  
|Purchased technology |  | $                 | 5,052 |  |                      | $ | (4,993 | )   |  | $ | 59     |          |  | $            | 5,052       |  |     | $ | (4,569 | ) |  | $ | 483 | 

For the three months
ended March 31, 2003 and 2002, amortization of purchased
technology was $424,000 and $414,000,
respectively. As of March 31, 2003, the estimated amortization is as follows:

|             |  |              |    | 
|------------ |  | ------------ | -- | 
|Year Ended   |  | Amortization |   
|December 31, |  | Expense      |   
|             |  |              |   
|2003         |  | $            | 32 | 
|2004         |  |              | 27 | 
|             |  |              |   
|Total        |  | $            | 59 | 
|             |  |              |   

Note 6  Segment Reporting

In the three months ended March 31, 2003 and 2002, the Company operated in
a single reportable segment. The Company plans to evaluate additional segment
disclosure requirements as it expands its operations. The Company had no
significant revenues from customers outside of the United States in the three
months ended March 31, 2003 and 2002 and had no significant long-lived assets
deployed outside the United States at March 31, 2003.

Note 7  Recently Issued Accounting Pronouncements

10



---



##### Table of Contents



In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others.FIN 45 requires that upon
issuance of a guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. The initial
recognition and measurement provisions of FIN 45 apply on a prospective basis
to guarantees issued or modified after December 31, 2002. The Company adopted
the disclosure requirements of FIN 45 effective December 31, 2002. As the
Company did not have any material guarantees outstanding, the
issuance of FIN 45 did not have an effect on the Companys financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, which amends FASB Statement No. 123,
Accounting for Stock-Based Compensation. SFAS No. 148 provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosure about the effects on reported net income of an entitys accounting
policy decision with respect to stock-based employee compensation, and requires
disclosure about those effects in both annual and interim financial statements.
SFAS No. 148 is effective for fiscal years ending after December 15, 2002. The
Company does not expect to change to using the fair value based method of
accounting for stock-based employee compensation; therefore, adoption of SFAS
No. 148 is not expected to have an impact on the financial position, results of
operations or cash flows of the Company.

Footnote 8  Contingencies

In the third quarter
of 2002, AT&T Wireless announced that it expects to cease
operating its Cellular Digital Packet Data network by June 30,
2004. The Company is currently in discussions with AT&T Wireless
and other wireless carriers to minimize any disruption of the
provision of its services to subscribers. On or about the actual
termination date of AT&T Wireless Cellular Digital Packet
Data network and where possible, certain affected subscribers would
be transferred to alternate Cellular Digital Packet Data networks
without a change to the hardware platform then used by those
subscribers. However, the Company estimates that as of June 30,
2004 the Company will have 12,000 subscribers in their initial
contract periods that are then using AT&T Wireless Cellular
Digital Packet Data network and that would need to use an alternate
wireless protocol to continue to use its services. To use an
alternate wireless protocol, existing hardware platforms would have
to be replaced for these subscribers. The Company does not expect to
realize a loss on the sale of these replacement hardware platforms.
While there is no assurance, the Company does not expect that the
termination of AT&T Wireless Cellular Digital Packet Data
network will have a material adverse impact on its financial results.




Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations.

Except for the historical information contained herein, the matters
discussed in this Form 10-Q are forward-looking statements involving risks and
uncertainties that could cause actual results to differ materially from those
in such forward-looking statements. Potential risks and uncertainties include,
but are not limited to, general economic and political conditions, our
historical and future losses, limited operating history, the infancy of the
wireless data industry where there is no established market for our products
and services, our ability to adapt to rapid technological change and our
dependence on wireless networks, network infrastructure and positioning systems
owned and controlled by others. Further information regarding these and other
risks is included in this Form 10-Q, in our annual report on
Form 10-K

11



---



##### Table of Contents



(No. 000-31511), dated March 31, 2003 and in our other filings with the SEC.
You should read the following description of our financial condition and
results of operations in conjunction with our financial statements and notes
thereto included in this Form 10-Q, in our Form 10-K for the year ended
December 31, 2002 and in our other filings with the SEC.

Overview

We integrate Global Positioning System technology, wireless
communications, transaction processing, software applications and the Internet
to enable companies to efficiently manage their mobile workers with
location-relevant and time-sensitive information. Our services are designed to
be easy-to-use, cost-effective, Internet-based tools for mobile resource
management that provide location, reporting, dispatch, messaging, and other
management services. Our services allow customers to use our website to manage
the activities of their employees, vehicles, and goods and services, and
provide for two-way communications between our customers and their mobile
workers. Our services also allow customers to conduct business operations, such
as event confirmation, signature verification, forms processing, project
management and timekeeping while their workers are in the field. We believe our
services provide significant value to our customers by decreasing the costs and
increasing the efficiency of their operations.

From July 1996 through June 1998, our operations consisted primarily of
various start-up activities relating to our current business, including
development of Global Positioning System technologies, recruiting personnel and
raising capital. We did not recognize any revenues prior to June 1998, and our
expenses consisted of research and development, sales and marketing and general
and administrative expenses. In 1998, we expanded our strategy and redirected
our focus to provide location-relevant and time-sensitive information services
and solutions to companies managing mobile resources. In the second half of
1998, we introduced FleetASAP, now called GeoManager, a service that leverages
existing infrastructure, including the Global Positioning System, wireless
networks and the Internet along with integrated transaction processing and
software applications, to enable companies to efficiently manage their mobile
resources. Subsequent to the introduction of FleetASAP, we have introduced a
number of additional services and features to our services, including two-way
communications, MobileForms, ConnectBusiness and DirectData.

Our services provide information to our customers in one or more of the
following ways. First, a customer can use any Internet-connected computer to
access our secure website, www.road.com. Second, a customer can use a wireline
or wireless telephone to access our speech-to-text voice portal. The website
and voice portal are connected to our Wireless Applications Processing Center,
a network of secure servers, which receives, processes and stores data as well
as serves data to our customers. Third, a customer can use our DirectData
service, which streams pre-processed data from our Wireless Applications
Processing Center directly to the customers legacy software applications. A
customer can then execute collaborative processing, which is the combination of
data provided by our services and data provided by the customers legacy
software applications yielding an enhanced set of data. Fourth, a customer can
configure certain third-party software applications, such as dispatching
software, to access and obtain requested data from our Wireless Applications
Processing Center using application programming interfaces.

The information technology infrastructure and network application software
used to provide our

12



---



##### Table of Contents



services reside at our Wireless Applications Processing Center.
Accordingly, our customers do not need to make a substantial investment in
acquiring and supporting capital equipment, such as hardware, software and data
networking equipment, to use our services.

Our services are enabled by the deployment of a platform to the customers
mobile worker. Our services operate with three independent platforms. First, a
mobile worker can use our proprietary hardware device embedded with software
and which integrates a Global Positioning System receiver with a wireless
modem. Second, a mobile worker can use our proprietary hardware device embedded
with software and an integrated Global Positioning System receiver and which is
tethered by cable to a wireless telephone. Each of these proprietary hardware
devices is called an Internet Location Manager. The Internet Location Manager
is installed in a mobile workers vehicle. Generally, the vehicle can be of any
type. Installation typically takes less than an hour, and is completed by our
subcontracted installation agents. Third, a mobile worker can use a location-
or wireless application protocol-enabled mobile telephone embedded with our
software application.

These platforms receive signals from Global Positioning System satellites
to determine location, velocity and time. From time to time, the platform also
collects other information, such as operational diagnostics. These data are
transmitted to our Wireless Applications Processing Center using wireless
networks and the Internet. If a wireless connection is not available, then the
platform will store up to five days of captured data and seek to transmit the
data when a wireless connection is available. To use services such as two-way
communications, MobileForms and ConnectBusiness, customers can provide mobile
workers a ruggedized personal digital assistant or our Internet Data Terminal,
which are connected to the Internet Location Manager, or, alternatively with
some of our services, a wireless application protocol-enabled mobile telephone.

Since 1998, we have derived substantially all of our revenues from the
sale of our services and the associated product hardware. Our service revenue
is composed of monthly fees. Our customers can contract to receive our services
for terms of one, two or three years and can purchase enhanced service features
for additional fees. As more customers use our services, the impact on our
service revenue is compounded. Our product revenue consists of sales of the
Internet Location Manager, Internet Data Terminal and ruggedized personal
digital assistant.

We recognize revenue when earned in accordance with applicable accounting
standards including American Institute of Certified Public Accountants
(AICPA) Statement of Position (SOP) No. 97-2, Software Revenue Recognition,
as amended. Through March 31, 2003, our services have been available only by
using our platforms or a location- or wireless application protocol-enabled
mobile telephone. Accordingly, service revenue is recognized ratably over the
minimum service contract period, which commences upon the installation of the
platform. We defer product revenue from our platform at installation and
recognize it ratably over the minimum service contract period. Product costs,
not in excess of related product revenue, are deferred at the time of shipment
and amortized ratably over the minimum service contract period. Where the
selling prices of our products are below our costs, we expense the difference
at the time of shipment of the related products. Allowances for sales returns
are recorded at the time product revenue is recognized.

To date, we have not sold our services outside the U.S. and Canada;
however, we intend to expand our service offerings to additional countries in
the future. We do not expect that revenues from

13



---



##### Table of Contents



international sales will be material in 2003.

We will incur stock compensation expense in current and future periods,
which represents non-cash charges incurred as a result of the issuance of stock
options to employees and consultants. The charge related to options granted to
employees is recorded based on the difference between the deemed fair value of
the common stock and the option exercise price of such options at the date of
grant, which is amortized over the option-vesting period. The charge related to
options granted to consultants is calculated at the end of each reporting
period using the Black-Scholes model, which approximates fair value and is
amortized based on the term of the consulting agreement or service period. The
amount of the charge for options granted to consultants in each period can
fluctuate depending on our stock price and volatility. At March 31, 2003,
deferred stock compensation expense was $294,000, which will be amortized in
future periods.

Since inception we have invested substantially in research and
development, marketing, the building of our sales channels and our overall
infrastructure. We anticipate that such investments may increase in the future.
We have incurred losses in each quarter since inception and expect to incur net
losses in the future. At March 31, 2003, we had an accumulated deficit of
$119.2 million. Our limited operating history makes it difficult to forecast
future operating results. Even if we were to achieve profitability in any
period, we may not sustain or increase profitability on a quarterly or annual
basis.

In the third quarter of 2002, AT&T Wireless announced that it expects to
cease operating its Cellular Digital Packet Data network by June 30, 2004. We
are currently in discussions with AT&T Wireless and other wireless carriers to
minimize any disruption of the delivery of our services to subscribers. On or
about the actual termination date of AT&T Wireless Cellular Digital Packet
Data network and where possible, certain affected subscribers would be
transferred to alternate Cellular Digital Packet Data networks without a change
to the hardware platform then used by those subscribers. However, we estimate
that as of June 30, 2004 we will have 12,000 subscribers in their initial
contract periods that are then using AT&T Wireless Cellular Digital Packet
Data network and that would need to use an alternate wireless protocol to
continue to use our services. To use an alternate wireless protocol, existing
hardware platforms would have to be replaced for these subscribers. We do not
expect to realize a loss on the sale of these replacement hardware platforms.
While there is no assurance, we do not expect that the termination of AT&T
Wireless Cellular Digital Packet Data network will have a material adverse
impact on our financial results.

Critical Accounting Policies

Financial Reporting Release No. 60, which was released by the SEC in
January 2002, requires all companies to include a discussion of critical
accounting policies or methods used in the preparation of financial statements.
Included in Note 1 of the Notes to the Consolidated Financial Statements
in our annual report on Form 10-K (No. 000-31511) is a summary of the significant accounting policies
and methods we use. The following is a discussion of the more significant of
these policies and methods.

Revenue Recognition

In accordance with applicable accounting standards, including SOP No.
97-2, Software Revenue Recognition, as amended, we recognize revenue when
earned. Specifically, we recognize revenue when

14



---



##### Table of Contents



the price is fixed and determinable, upon persuasive evidence of an
agreement, when we have fulfilled our obligations under any such agreement and
upon a determination that collection is probable.

Through March 31, 2003, our services have been available only by using our
platform or a location- or wireless application protocol-enabled mobile
telephone. Accordingly, through March 31, 2003, service revenue, which is
composed of monthly fees, was recognized ratably over the minimum service
contract period, which commenced (a) upon installation where
customers have installed our platform in mobile worker vehicles or
(b) upon the creation of subscription licenses and a customer
account on our website where customers have elected to use our
services with a location-enabled mobile telephone.

Our product revenue primarily consists of sales of the Internet Location
Manager, Internet Data Terminal and ruggedized personal digital assistant. We
defer product revenue at installation and recognize it ratably over the minimum
service contract period, which generally is two or three years. Renewal rates
for our services are not considered priced at a bargain in comparison to the
initial sales price of an associated product (as described in Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements). Changes to the
pricing of our products and services in the future could result in the
recognition of product revenue over periods that extend beyond the minimum
service contract period. Allowances for sales returns are recorded at the time
product revenue is recognized.

Historically, the selling prices of our products have often been at or
below our costs. Product costs not in excess of related product revenue are
deferred at the time of shipment and amortized ratably over the minimum service
contract period. Where the selling prices of our products are below our costs,
we expense the difference at the time of shipment of the related products.

Allowances for Doubtful Accounts

Historically, we have had a significant number of small- to medium-sized
companies utilizing our services. These customers are involved in diverse
businesses. Our payment arrangements with customers generally provide 30-day
payment terms. At the time that customers contract with us for our services, we
assess their creditworthiness.

During economic downturns, certain of our customers have had difficulty
with their cash flows. The nature of our relationship with customers is
inherently long-term and we have extended and may extend payment terms on an
exception basis. We regularly review our customers ability to satisfy their
payment obligations and provide an allowance for doubtful accounts for all
specific receivables that we believe are not collectible. When these conditions
arise, we suspend recognition of revenue until collection becomes probable or
cash is collected. Beyond these specific customer accounts, we record an
allowance based on the size and age of all receivable balances against which we
have not established a specific allowance. These allowances are based on our
experience in collecting such accounts.

Although we believe that we can make reliable estimates for doubtful
accounts, the size and diversity of our customer base, as well as overall
economic conditions, may affect our ability to accurately estimate revenue and
bad debt expense. Actual results may differ from those estimates.

15



---



##### Table of Contents



RESULTS OF OPERATIONS

Three Months Ended March 31, 2003 and 2002

Service Revenue

Service revenue increased to $10.6 million from $7.3 million for the three
months ended March 31, 2003 and 2002, respectively, as a direct result of the
growth in our installed base of subscribers to our services.

Product Revenue

Product revenue increased to $3.1 million from $2.4 million for three
months ended March 31, 2003 and 2002, respectively, and is consistent with the
growth in our installed base of subscribers. As new subscribers are added to
our installed base, the amount of both deferred revenue and deferred costs
recognized ratably over the minimum service contract period increases as well.
Upon completion of the initial term of a customers contract, recognition of
both deferred product revenue and product cost will be complete. Customers may
then renew their agreements for future services without the purchase of new
hardware and, therefore, we anticipate that product revenue will grow more
slowly than service revenue.

Cost of Service Revenue

Cost of service revenue consists of expenses related to the delivery and
support of our services. Direct expenses are composed of costs associated with
connecting our services to wireless networks and the Internet and royalty and
subscription fees paid to others. Support and other delivery costs include such
expenses as employee salaries and depreciation of our Wireless Applications
Processing Center. Cost of service revenue increased to $3.8 million from $3.2
million in the three months ended March 31, 2003 and 2002, respectively. The
increase in cost of service revenue was primarily the result of increases in
direct service delivery expenses, accompanied by a smaller increase in employee
related costs. Headcount increased to 74 from 51 at March 31, 2003 and 2002,
respectively. Direct expenses generally increase at a rate proportional to the
growth in subscribers using our services. Personnel costs and depreciation
expense generally increase at a slower rate than the growth rate of subscribers
to our services. As a result, we expect that the growth in service revenues
will be greater than the growth in cost of service revenue as we continue to
add subscribers.

Cost of Product Revenue

Cost of product revenue consists of the cost of the Internet Location
Manager, Internet Data Terminal, ruggedized personal digital assistant and
related parts; costs associated with the final assembly, test, provisioning,
delivery and installation of our products; and other costs such as provisions
for inventory and repair costs. Historically, the selling prices of our
products were often at or below our costs. Product costs not in excess of
related product revenue are deferred at the time of shipment and amortized
ratably over the minimum service contract period. Where the selling prices of
our products are below our costs, we expense the difference at the time of
shipment of the related products. Generally, we expect the selling prices of
our products to be approximately equal to or exceed the product costs in future
periods. The impact of selling products below our cost on future cash flow from
operations is expected to be minimal as our service revenue stream expands and
is renewed. As new

16



---



##### Table of Contents



subscribers are added to our installed base, the amount of both deferred
revenue and deferred costs recognized ratably increases as well. Upon
completion of the initial term of a customers contract, recognition of both
deferred product revenue and product cost will be complete. Customers may then
renew their agreements for future services without the purchase of new hardware
and, therefore, we anticipate that product revenue and cost of product revenue
will grow more slowly than service revenue.

Cost of product revenue increased to $4.6 million from $4.0 million in the
three months ended March 31, 2003 and 2002, respectively. The increase in the
cost of product revenue was primarily the result of associated increases in
product cost recognized from deferrals.

Sales and Marketing Expenses

Sales and marketing expenses consist of employee salaries, sales
commissions, and marketing and promotional expenses. Sales and marketing
expenses decreased to $2.6 million in the three months ended March 31, 2003
from $3.0 million in the same period in 2002. The reduction in expenses was
attributed to reductions in promotional expenses, travel and facilities costs.
Sales and marketing headcount increased to 85 at March 31, 2003 from 84 at
March 31, 2002. We expect that sales and marketing expenses will increase as we
expand our sales and marketing efforts, including, but not limited to, modest
headcount growth and promotional expenses related to new product and service
offerings.

Research and Development Expenses

Research and development expenses consist of employee salaries and
expenses related to development personnel and consultants, as well as expenses
associated with software and hardware development. Research and development
expenses decreased to $1.3 million in the three months ended March 31, 2003
from $1.6 million in the three months ended March 31, 2002, primarily due to
reductions in employee-related expenses and facilities costs. Headcount
decreased to 55 at March 31, 2003 from 67 at March 31, 2002. We expect that
research and development expenses will increase in future periods as we develop
and introduce new products and services.

General and Administrative Expenses

General and administrative expenses consist of employee salaries and
related expenses for executive and administrative costs, accounting and
professional fees, recruiting costs and provisions for doubtful accounts.
General and administrative expenses decreased to $2.2 million from $2.8 million
during the three months ended March 31, 2002 and 2003, respectively. The
decrease in 2003 is primarily the result

17



---



##### Table of Contents



of reductions in the provisions for allowance for doubtful accounts.
General and administrative headcount totaled 51 and 48 at March 31, 2003 and
2002, respectively.

Intangibles Amortization

Intangibles amortization relates to the intangible assets (purchased
technology) that are being amortized over an estimated useful life of three
years.

Stock Compensation Expense

Deferred stock compensation expense related to stock option grants to
employees and consultants was $294,000 at March 31, 2003. Stock compensation
expense is amortized on an accelerated basis over the vesting period of
individual awards. Amortization of deferred stock compensation expense
increased to $192,000 from $61,000 for the three months ended March 31, 2003
and 2002, respectively.

Interest Income and Interest Expense

Interest income is composed primarily of interest income on cash, cash
equivalents and short-term investments and interest expense relates to the
short-term financing of insurance costs. Interest income net of
interest expense decreased to $148,000 from $239,000 for the three months ended
March 31, 2003 and 2002, respectively. The decreases resulted from lower
interest rates on invested balances.

Other Expense, Net

During the three month period ended March 31, 2003 and 2002, other expense
consisted primarily of immaterial net foreign currency exchange gains related
to our subsidiary in India.

Income Taxes

Since inception, we have incurred net losses for federal and state tax
purposes. Except for minimum state income and franchise taxes, we have not
recognized any tax provision or benefit.

18



---



##### Table of Contents



Net Loss

Net loss decreased to $1.3 million for the three months ended March 31,
2003 from $5.2 million for the same period in 2002. Our operating costs
increased to $15.2 million from $15.1 million for the three months ended March
31, 2003 and 2002, respectively. The increase in operating costs was
accompanied by an increase in revenues to $13.7 million from $9.7 million for
the three months ended March 31, 2003 and 2002, respectively.

We believe period-to-period comparisons of our operating results are not
necessarily meaningful. You should not rely on them to predict our future
performance. The amount and timing of our operating expenses may fluctuate
significantly in the future as a result of a variety of factors.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31,
2003, we had $37.0 million of cash and cash equivalents and $2.2 million of restricted short-term investments. We held no
available-for-sale securities at March 31, 2003.

We currently have a $2.0 million revolving line of credit facility against
which there were no borrowings as of March 31, 2003. The line, against which
letters of credit have been issued, is collateralized by a restricted
certificate of deposit of $2.0 million. There are two letters of credit
outstanding under this revolving line of credit totaling $733,735 at March 31,
2003 and these letters of credit expire on October 29, 2003 and December 31, 2003. This credit facility
expires in November 2003.

Net cash provided by
(used in) operating activities was $1.2 million and
$(3.5) million for the three months ended March 31, 2003 and 2002,
respectively. Cash provided by operating activities during the three
months ended March 31, 2003, was attributed primarily due to an
increase in deferred revenue and customer deposits, decreases in
accounts receivable and inventory, depreciation and amortization,
offset by net losses and an increase in deferred product costs. Cash used in operating activities during the three months ended March
31, 2002, was attributed primarily to net losses and increases in accounts
receivable, offset in part by depreciation and amortization, provisions for bad
debts and decreases in inventory and deferred product costs.

Net cash used in investing activities during the three months ended March
31, 2003 and 2002 was $136,000 and $210,000, respectively. In both periods,
cash used resulted primarily from purchases of property and equipment and other
assets.

Net cash provided by financing activities was $289,000 and $579,000 for
the three months ended March 31, 2003 and 2002, respectively. In both periods,
cash provided was attributed to the sale of common stock and proceeds from
payments on notes receivable issued to stockholders.

As of March 31, 2003 approximately $2.3 million of our gross accounts
receivable were over 90 days old. We
believe we have adequately provided allowances as of March 31, 2003 for any
such amounts that may ultimately become uncollectible. We defer product costs
at time of shipment and expense any amounts in excess of the related product
revenue at that time. Generally, we record

19



---



##### Table of Contents



accounts receivable from our customers and defer related product revenue
upon installation. Both deferred product cost and revenue are recognized
ratably over the minimum service contract period. As we grow our business,
deferred product costs will generally exceed deferred revenue due to our
practice of recording deferred product costs at time of shipment versus
deferred revenue at time of installation.

We believe that our cash, cash equivalents and restricted short-term
investments will be sufficient to meet our anticipated cash needs for operating
expenses, working capital and capital expenditures for at least the next 12
months. If cash generated from operations is insufficient to satisfy our
liquidity requirements, we may seek to obtain a larger credit facility or to
sell additional equity or debt securities, which may not be available on
commercially reasonable terms or at all, and which could dilute existing
stockholders.

RISK FACTORS

In addition to the other information contained in this Report, the
following factors should be carefully considered in evaluating our business and
prospects. The risks and uncertainties described below are intended to be ones
that are specific to us or our industry and that we deem material, but they are
not the only ones that we face.

Due to our limited operating history it is difficult to predict future
operating results or our stock price.

An evaluation of our business is difficult because we have a limited
operating history. We commenced operations in July 1996 and commercially
offered our first services in the second half of 1998. We may not achieve
profitability or continue to grow. We face a number of risks encountered by
companies in the Global Positioning System, wireless communications,
transaction processing, software applications and Internet information
industries, including:



| |  |  | our need to introduce reliable and robust products and services that
meet the demanding needs of customers;             
| | - |  | ------------------------------------------------------------------------------------------------------------------------
|
| |  |  | our need to expand our marketing, sales and support organizations, as
well as our distribution
channels;                
|
| |  |  | our ability to anticipate and respond to market competition and
technological change;                                   
|
| |  |  | the uncertainty of market acceptance of our services;                                                                   
|
| |  |  | our need to manage expanding operations;                                                                                
|
| |  |  | our dependence on wireless carriers;                                                                                    
|
| |  |  | limited coverage of wireless networks; and                                                                              
|
| |  |  | any need to migrate to new networks, which could cause our products
to be incompatible with new
networks or out of date.

20



---



##### Table of Contents



Our business strategy may not be successful, and we may not successfully
address these risks.

If we do not increase revenue from the sale of our services to new and existing
customers, our business may not be successful.

Our success depends on our ability to increase revenue from the sale of
our services to new and existing customers and on market acceptance of our
services. We may not be able to achieve widespread adoption of our services.
Furthermore, changes such as increases in our pricing for products and services
or the pricing of competing products and services may harm our ability to
increase sales of our products and services to new and existing customers. If
we are not able to expand our customer base and increase our revenue from new
and existing customers, our business will be seriously harmed.

If, pursuant to its announcement, AT&T Wireless ceases to operate its Cellular
Digital Packet Data network in 2004, or our other wireless carriers decide to
abandon Cellular Digital Packet Data, Integrated Digital Enhanced Network,
General Packet Radio Services or Code Division Multiple Access 1XRTT
technologies or do not continue to expand their Cellular Digital Packet Data,
Integrated Digital Enhanced Network, General Packet Radio Services or Code
Division Multiple Access 1XRTT systems, we may be unable to deliver our
services and our revenues would decrease.

Our services function only on Cellular Digital Packet Data, General Packet
Radio Services or Code Division Multiple Access 1XRTT networks or Integrated
Digital Enhanced Networks. These protocols cover only portions of the U.S. and
Canada, and may not gain widespread market acceptance. If wireless carriers
abandon these protocols in favor of other types of wireless technology, we may
not be able to provide services to our customers. Beginning March 31, 2003,
AT&T Wireless discontinued new sales of Cellular Digital Packet Data service.
AT&T Wireless has also indicated that it expects to cease operating its
Cellular Digital Packet Data network by June 30, 2004. If the termination of
AT&T Wireless Cellular Digital Packet Data network disrupts our ability to
deliver our services to certain of our customers, our revenues would decrease
and our customers satisfaction would suffer. In addition, if wireless carriers
do not expand their coverage areas, we will be unable to meet the needs of
customers who wish to use our services outside the current coverage area.

If one or more of the agreements we have with wireless carriers is terminated,
we may be unable to offer our services to our customers within the carriers
coverage area and our business may be harmed.

Wireless carriers offering services compatible with our services have
little overlap in their service coverage areas. Our existing agreements with
wireless carriers may be terminated upon as little as fifteen-days written
notice or immediately upon the occurrence of certain conditions. In connection
with ceasing operation of its Cellular Digital Packet Data network, AT&T
Wireless may seek to terminate or not to renew its contract for Cellular
Digital Packet Data service with us. If one or more of our wireless carriers
decides to terminate or not to renew its contract with us, we may incur
additional costs relating to obtaining alternate coverage from another wireless
carrier outside of its primary coverage area, or we may be unable to replace
the coverage at all, causing a complete loss of service to our customers in
that coverage area.

21



---



##### Table of Contents



We depend on a limited number of third parties to manufacture and supply
critical components for our products and services.

If these parties do not perform their obligations, or if they cease to
manufacture and supply components critical for our products and services, we
may be unable to find other suppliers or operate our business. A subscriber
requires our Internet Location Manager or a location- or wireless application
protocol-enabled mobile telephone to use our services. To use our services with
two-way communications, a subscriber requires an Internet Location Manager and
either an Internet Data Terminal or a ruggedized personal digital assistant.
The Internet Location Manager, which we install in each subscribers vehicle,
determines the workers location, velocity and orientation, and gathers other
information about the subscribers activities. The Internet Data Terminal, when
installed in a subscribers vehicle, adds the incremental ability to send and
receive messages to and from the worker. We cannot be sure that alternative
sources for key components used in the Internet Location Manager and the
Internet Data Terminal will be available when needed, or if available, that
these components will be available on commercially reasonable terms. We rely on
sole suppliers and manufacturers for a number of key components for these
products and do not have long-term agreements with any of these suppliers or
manufacturers. Our sole suppliers and manufacturers of key components include:



| |  |  | Taiwan Semiconductor Manufacturing Company, our sole manufacturer of
Global Positioning
System digital receiver chips;
| | - |  | ----------------------------------------------------------------------------------------------------------------------
|
| |  |  | Valence Semiconductor, our sole supplier of radio frequency chips;                                                    
|
| |  |  | Orient Semiconductor Electronics, our sole manufacturer of Internet
Location Managers;                                
|
| |  |  | Micronet, our sole supplier of Internet Data Terminals;                                                               
|
| |  |  | Symbol Technologies, our sole supplier of ruggedized personal digital
assistants;                                     
|
| |  |  | Motorola, our sole supplier of
microcontrollers;                                                                      
|
| |  |  | Motorola, our sole supplier of wireless modems operable on Integrated
Digital Enhanced Networks;                      
|
| |  |  | Dallas Semiconductor, our sole
supplier of combined clock and analog-to-digital conversion circuits;                  
|
| |  |  | LG Innotek, our sole supplier
of radio frequency filters; and                                                         
|
| |  |  | Voxeo, our sole supplier of voice-based access services for use with
our speech-to-text voice portal
service.         

If our agreements with these or other suppliers and manufacturers are
terminated or expire, if we are unable to obtain sufficient quantities of
components critical for our products and services, if the quality of these
components is inadequate, or if the terms for supply of these components become
commercially unreasonable, our search for additional or alternate suppliers and
manufacturers could result in significant delays, added expense and our
inability to maintain or expand our subscriber base. Any of these events could
require us to take unforeseen actions or devote additional resources to provide
our products and services and could harm our ability to compete effectively.

We may establish alliances or acquire technologies or companies in the future,
which could result in the dilution of our stockholders and disruption of our
business.

22



---



##### Table of Contents



We are continually evaluating business alliances and external investments
in technologies related to our business. Acquisitions of companies, divisions
of companies, businesses or products and strategic alliances entail numerous
risks, any of which could materially harm our business in several ways,
including:



| |  |  | diversion of managements attention from our core business objectives
and other business concerns;
| | - |  | --------------------------------------------------------------------------------------------------
|
| |  |  | failure to integrate the acquired company into our pre-existing
business;                         
|
| |  |  | potential loss of key employees from either our pre-existing business
or the acquired business;   
|
| |  |  | dilution of our existing stockholders as a result of issuing equity
securities; and               
|
| |  |  | assumption of liabilities of the acquired company.                                                

Some or all of these problems may result from current or future alliances,
acquisitions or investments. Furthermore, we may not realize any value from
these alliances, acquisitions or investments.

If we cannot deliver the features and functionality our customers demand, we
will be unable to retain or attract new customers.

Our success depends upon our ability to determine the features and
functionality our customers demand and to design and implement services that
meet their needs in an efficient manner. We cannot assure you that we can
successfully determine customer requirements or that our future services will
adequately satisfy customer demands. To date, the design of our services has
been based on our internal efforts and feedback from our existing and potential
customers. In addition, we may experience difficulties that could delay or
prevent the successful development, introduction or marketing of new services
and service enhancements. If we cannot effectively deploy, maintain and enhance
our services, our expenses may increase, we may not be able to recover our
costs and our competitive position may be harmed.

We have historically incurred losses and these losses may increase in the
future.

We have never been profitable. At March 31, 2003, we had an accumulated
deficit of $119.2 million. In order to become profitable and sustain
profitability, we will need to generate significant revenues to offset our cost
of revenues, sales and marketing, research and development and general and
administrative expenses. We may not achieve or sustain our revenue or profit
goals and our losses may increase in the future. In order to facilitate the
sale of our services, we have sold and may sell our hardware below our costs.
As a result, we have experienced, and may continue to experience, negative
gross margins on the sale of our hardware.

Our quarterly operating results are subject to fluctuations, and our stock
price may decline if we do not meet the expectations of investors and analysts.

Our quarterly revenues and operating results are difficult to predict and
may fluctuate significantly

23



---



##### Table of Contents



from quarter to quarter due to a number of factors, many of which are
outside our control. These factors include, but are not limited to:



| |  |  | delays in market acceptance or implementation by customers of our
services;                                                              
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | changes in length of sales cycles of or demand by our customers for
existing and additional services;                                    
|
| |  |  | changes in or cancellations of our agreements with wireless carriers;                                                                    
|
| |  |  | introduction of new services by us or our competitors;                                                                                   
|
| |  |  | changes in our pricing policies or those of our competitors or
suppliers;                                                                
|
| |  |  | changes in our mix of sources of revenues;                                                                                               
|
| |  |  | changes in the productivity of our distribution channels;                                                                                
|
| |  |  | changes in accounting standards, including standards relating to
revenue recognition, business
combinations and stock-based compensation;
|
| |  |  | wireless data and Internet market conditions; and                                                                                        
|
| |  |  | general economic and political conditions.                                                                                               

Our expense levels are based, in part, on our expectation of future
revenues. Additionally, a substantial portion of our expenses is relatively
fixed. As a result, any shortfall in revenues relative to our expectations
could cause significant changes in our operating results from quarter to
quarter. We believe period-to-period comparisons of our revenue levels and
operating results are not meaningful. You should not rely on our quarterly
revenues and operating results to predict our future performance. In some
future quarter our operating results may be below the expectations of public
market analysts and investors and, as a result, the price of our common stock
may fall.

Our stock price is volatile, which may cause you to lose money and result in
costly litigation that could divert our resources.

Stock markets have recently experienced dramatic price and volume
fluctuations, particularly for shares of technology companies. These
fluctuations can be unrelated to the operating performance of these companies.
Broad market fluctuations may reduce the market price of our common stock and
cause you to lose some or all of your investment. These fluctuations may be
exaggerated if the trading volume of our common stock is low. In addition, due
to the technology-intensive and emerging nature of our business and the mobile
resource management sector, the market price of our common stock may rise and
fall in response to:



| |  |  | announcements of technological or competitive developments;
| | - |  | -----------------------------------------------------------

24



---



##### Table of Contents





| |  |  | acquisitions or strategic alliances by us or our competitors;                                          
| | - |  | -------------------------------------------------------------------------------------------------------
|
| |  |  | the gain or loss of a significant customer or order;                                                   
|
| |  |  | changes in estimates of our financial performance or changes in
recommendations by securities
analysts;
|
| |  |  | security breaches; and                                                                                 
|
| |  |  | disposition of shares of our common stock held by large investors.                                     

When the market price of a companys stock drops significantly,
stockholders often institute securities class action lawsuits against that
company. A lawsuit against us could cause us to incur substantial costs and
could divert the time and attention of our management and other resources from
our business.

We have limited resources and may be unable to manage our anticipated growth in
operations.

If we fail to develop and maintain our services as we experience rapid
growth, demand for our services could decrease, which would result in a
decrease in our revenues. Our development and expansion have placed, and will
continue to place, significant strain on our managerial, operational and
financial resources. Due to the limited deployment of our services, we are
unable to assess our ability to grow the business and manage a substantially
larger number of customers and additional services.

We face competition from existing and potential competitors, which could reduce
our market share and revenues.

The market for our services is competitive and is expected to become even
more competitive in the future. Our customers evaluate our services primarily
on the basis of the functionality, ease of use, quality, price, geographic
coverage of services and corporate financial strength and those of our
competitors. If we are unable to compete successfully in these areas,
competitive pressures may harm our business, resulting in a loss of market
share and revenues. Our current and potential competitors include:



| |  |  | other providers of vehicle-location services, such as QUALCOMM, whose
OmniTRACS service uses satellite communication technology to manage
fleets of trucks that travel long distances;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | other wireless Internet companies, such as Openwave, Research in
Motion and Aether Systems;                                                                                           
|
| |  |  | companies with solutions that integrate location, wireless
communications and call centers, such as General Motors; and                                                               
|
| |  |  | companies that provide wireless, location-relevant applications, or
that are working on emergency-911 solutions, such as SignalSoft (a
subsidiary of Openwave).                       

Many of our existing and potential competitors have substantially greater
financial, technical,

25



---



##### Table of Contents



marketing and distribution resources than we do. Additionally, many of
these companies have greater name recognition and more established
relationships with our target customers. Furthermore, these competitors may be
able to adopt more aggressive pricing policies and offer customers more
attractive terms than we can.

Our services also compete with alternative means of communication between
mobile workers and their managers, including wireless telephones, two-way
radios and pagers. In addition, we expect that new competitors will enter the
market for location-relevant wireless information as businesses and consumers
increasingly demand information when they are mobile. Furthermore, the
widespread adoption of industry standards may make it easier for new market
entrants or existing competitors to offer the services we offer or may offer in
the future.

Our success and ability to compete depends upon our ability to secure and
protect patents, trademarks and other proprietary rights.

Our success depends on our ability to protect our proprietary rights to
the technologies used to implement and operate our services in the U.S. and in
foreign countries. In the event that a third party breaches the confidentiality
provisions or other obligations in one or more of our agreements or
misappropriates or infringes on our intellectual property or the intellectual
property licensed to us by third parties, our business would be seriously
harmed. To protect our proprietary rights, we rely on a combination of trade
secrets, confidentiality and other contractual provisions and agreements, and
patent, copyright and trademark laws, which afford us only limited protection.
Third parties may independently discover or invent competing technologies or
reverse engineer our trade secrets, software or other technology. Furthermore,
laws in some foreign countries may not protect our proprietary rights to the
same extent as the laws of the U.S. Therefore, the measures we take to protect
our proprietary rights may not be adequate.

A disruption of our services due to accidental or intentional security breaches
may harm our reputation, cause a loss of revenues and increase our expenses.

Unauthorized access, computer viruses and other accidental or intentional
actions could disrupt our information systems or communications networks. We
expect to incur significant costs to protect against the threat of security
breaches and to alleviate problems caused by any breaches. Currently, the
transmission of our customers proprietary information is not protected by
encryption technology. If a third party were to misappropriate our customers
proprietary information, we could be subject to claims, litigation or other
potential liabilities that could seriously harm our revenues and result in the
loss of customers.

System or network failures could reduce our sales, increase costs or result in
liability claims and seriously harm our business.

Any disruption to our services, information systems or communications
networks or those of third parties could result in the inability of our
customers to receive our services for an indeterminate period of time. Our
services may not function properly if our systems fail, or if there is an
interruption in the supply of power, or if there is an earthquake, fire, flood
or other natural disaster, or an act of war or terrorism. Any disruption to our
services could cause us to lose customers or revenue, or face litigation,

26



---



##### Table of Contents



customer service or repair work that would involve substantial costs and
distract management from operating our business. We currently do not have fully
redundant systems for uninterrupted services at an alternate site. Our
operations depend upon our ability to maintain and protect our computer systems
in our principal facilities in Redwood City, California, which are on or near
earthquake fault zones, and Ashburn, Virginia.

We depend on Global Positioning System technology owned and controlled by
others. If we do not have continued access to Global Positioning System
technology and satellites, we will be unable to deliver our services and
revenues will decrease.

Our services rely on signals from Global Positioning System satellites
built and maintained by the U.S. Department of Defense. Global Positioning
System satellites and their ground support systems are subject to electronic
and mechanical failures and sabotage. If one or more satellites malfunction,
there could be a substantial delay before they are repaired or replaced, if at
all, and our services may cease and customer satisfaction would suffer.

In addition, the U.S. government could decide not to continue to operate
and maintain Global Positioning System satellites over a long period of time or
to charge for the use of the Global Positioning System. Furthermore, because of
ever-increasing commercial applications of the Global Positioning System and
international political unrest, U.S. government agencies may become
increasingly involved in the administration or the regulation of the use of
Global Positioning System signals in the future. If factors such as the
foregoing affect the Global Positioning System, for example by affecting the
availability, quality, accuracy or pricing of Global Positioning System
technology, our business will suffer.

Our Global Positioning System technology depends on the use of radio frequency
spectrum controlled by others.

Global Positioning System technology is dependent on the use of radio
frequency spectrum. An international organization known as the International
Telecommunications Union controls the assignment of spectrum. If the
International Telecommunications Union reallocates radio frequency spectrum,
our services may become less useful or less reliable. This would, in turn, harm
our business. In addition, emissions from mobile satellites and other equipment
using other frequency bands may adversely affect the utility and reliability of
our services.

We depend on wireless networks owned and controlled by others. If our customers
do not have continued access to sufficient capacity on reliable networks, we
may be unable to deliver services and our revenues could decrease.

Our ability to grow and achieve profitability depends on the ability of
wireless carriers to provide sufficient network capacity, reliability and
security to our customers. Even where wireless carriers provide coverage to
entire metropolitan areas, there are occasional lapses in coverage, for example
due to tall buildings blocking the transmission of data to and from wireless
modems used with our services. These effects could make our services less
reliable and less useful, and customer satisfaction could suffer. Our financial
condition could be seriously harmed if our wireless carriers were to increase
the prices of their services, or to suffer operational or technical failures.
If wireless carriers do not expand

27



---



##### Table of Contents



their coverage, we may be unable to offer our service to additional areas.

Defects or errors in our services could result in the cancellation or delays of
our services, which would damage our reputation and harm our financial
condition.

We must develop our services quickly to keep pace with the rapidly
changing Global Positioning System, wireless communications, transaction
processing, software and Internet markets. Products and services that address
these markets are likely to contain undetected errors or defects, especially
when first introduced or when new versions are introduced. Our services may not
be free from errors or defects, which could result in the cancellation or
disruption of our services or dissatisfaction of customers. This would damage
our reputation and result in lost revenues, diverted development resources, and
increased service and warranty costs.

The reporting of inaccurate location-relevant information could cause the loss
of customers and expose us to legal liability.

The accurate reporting of location-relevant information is critical to our
customers businesses. If we fail to accurately report location-relevant
information, we could lose customers, our reputation and ability to attract new
customers could be harmed, and we could be exposed to legal liability. We may
not have insurance adequate to cover losses we may incur as a result of these
inaccuracies.

Claims that we infringe third-party proprietary rights could result in
significant expenses or restrictions on our ability to provide our services.

Third parties may claim that our current or future products or services
infringe their proprietary rights or assert other claims against us. As the
number of entrants into our market increases, the possibility of an
intellectual property or other claim against us grows. Any intellectual
property or other claim, with or without merit, would be time-consuming and
expensive to litigate or settle and could divert management attention from
focusing on our core business. As a result of such a dispute, we may have to
pay damages, incur substantial legal fees, develop costly non-infringing
technology, if possible, or enter into license agreements, which may not be
available on terms acceptable to us, if at all. Any of these results would
increase our expenses and could decrease the functionality of our services,
which would make our services less attractive to our current or potential
customers. We have agreed in some of our agreements, and may agree in the
future, to indemnify other parties for any expenses or liabilities resulting
from claimed infringements of the proprietary rights of third parties.

From time to time we are or may be subject to litigation that could result in
significant costs to us.

From time to time, we are or may be subject to litigation in the ordinary
course of business relating to any number or type of claims, including claims
for damages related to errors and malfunctions of our services or hardware
platform or their deployment. In addition, we currently are and may in the
future be, subject to litigation alleging violations of various federal and
state securities laws. A securities, product liability or other claim could
seriously harm our business because of the costs of defending the lawsuit,
diversion of employees time and attention, and potential damage to our
reputation. Some of our agreements with our customers, suppliers and other
third parties contain provisions designed to limit exposure to potential
claims. Limitation of liability provisions contained in our agreements may not
be

28



---



##### Table of Contents



enforceable under the laws of some jurisdictions. As a result, we could be
required to pay substantial amounts of damages in settlement or upon the
determination of any of these types of claims. Although we carry general
liability and directors and officers insurance, our insurance may not cover
potential claims or may not be adequate to cover all costs incurred in defense
of potential claims or to indemnify us for all liability that may be imposed.

If the use of the Internet by businesses does not continue to grow, our
business will be harmed.

Our future success is dependent on continued growth in the use of the
Internet by businesses. The use and acceptance of the Internet by businesses
may not increase for a number of reasons, including the cost and availability
of Internet access and concerns about privacy, security and reliability.

Capacity constraints caused by growth in the use of the Internet may
impede further development of the Internet to the extent that users experience
delays, transmission errors and other difficulties. If the necessary
infrastructure, products, services or facilities are not developed, or if the
Internet does not become a viable and widespread commercial medium, we may not
be able to grow our business.

Government regulations and standards may harm our business and could increase
our costs or reduce our opportunities to earn revenues.

In addition to regulations applicable to businesses in general, we may
also be subject to direct regulation by governmental agencies, including the
Federal Communications Commission and Department of Defense. These regulations
may impose licensing requirements or safety standards, for example with respect
to human exposure to electromagnetic radiation and signal leakage. A number of
legislative and regulatory proposals under consideration by federal, state,
provincial, local and foreign governmental organizations may lead to laws or
regulations concerning various aspects of the Internet, wireless communications
and Global Positioning System technology, including on-line content, user
privacy, taxation, access charges and liability for third-party activities.
Additionally, it is uncertain how existing laws governing issues such as
taxation on the use of wireless networks, intellectual property, libel, user
privacy and property ownership will be applied to our services. The adoption of
new laws or the application of existing laws may expose us to significant
liabilities and additional operational requirements, which could decrease the
demand for our services and increase our cost of doing business. Wireless
carriers who supply us with airtime are subject to regulation by the Federal
Communications Commission, and regulations that affect them could also increase
our costs or limit the provision of our services.

Our success depends on our ability to maintain and expand our sales channels.

In order to increase our market awareness, customer base and revenues, we
need to expand our direct and indirect sales operations. There is strong
competition for qualified sales personnel in our business, and we may not be
able to attract and retain sufficient new sales personnel to expand our
operations. New sales personnel require training and it takes time for them to
achieve full productivity, if at all. In addition, we believe that our success
is dependent on expansion of our indirect distribution channels, including our
relationships with wireless carriers, independent sales agents and distribution
partners. To date, we have relationships with a limited number of these
wireless carriers, independent sales agents and distribution partners. These
sales channel partners require training in selling our products and

29



---



##### Table of Contents



services and it will take time for these partners to achieve productivity,
if at all. We may not be able to establish relationships with additional
distributors on a timely basis, or at all. Our distributors, many of which are
not engaged with us on an exclusive basis, may not devote adequate resources to
promoting and selling our services.

We depend on recruiting and retaining qualified personnel and our inability to
do so would seriously harm our business.

Because of the technical nature of our services and the market in which we
compete, our success depends on the continued services of our current executive
officers and our ability to attract and retain qualified personnel with Global
Positioning System, wireless communications, transaction processing, software
and Internet expertise. Competitors and others have in the past, and may
attempt in the future, to recruit our employees. In addition, new employees
generally require substantial training, which requires significant resources
and management attention. Even if we invest significant resources to recruit,
train and retain qualified personnel, we may not be successful in our efforts.

We may need and may not be able to obtain additional capital, which could
prevent us from carrying out our business strategy.

We anticipate that our available cash resources will be sufficient to fund
our operating needs until March 2004, including the expansion of sales and
marketing and research and development programs during that period. Thereafter,
we may require additional financing in an amount that we cannot determine at
this time. If our plans or assumptions change or are inaccurate, we may be
required to seek capital sooner than anticipated. We may need to raise funds
through public or private debt or equity financings. If we need to raise
additional funds, we may not be able to do so on commercially reasonable terms,
or at all, and may not be able to continue to fund our operations.

Fluctuations in the value of foreign currencies could result in increased
product costs and operating expenses.

We have suppliers and manufacturers that are located outside the U.S. Some
transactions relating to supply and development agreements may be conducted in
currencies other than the U.S. dollar, and fluctuations in the value of foreign
currencies relative to the U.S. dollar could cause us to incur currency
exchange costs. In addition, some of our transactions denominated in U.S.
dollars may be subject to currency exchange rate risk. We cannot predict the
effect of exchange rate fluctuations on our future operating results. Should
there be a sustained increase in average exchange rates for the local
currencies in these countries, our suppliers and manufacturers may request a
price increase at the end of the contract period.

Our platform contains encryption technology whose export is restricted by law,
which may slow our growth or result in significant costs.

The U.S. government generally limits the export of encryption technology,
which our service infrastructure incorporates. Foreign countries may impose
similar regulatory requirements. If any export approval that we receive is
revoked or modified, if our technology is unlawfully exported or if the U.S.
government adopts new legislation or regulations restricting export of our
services and encryption

30



---



##### Table of Contents



technology, we may not be able to distribute our services to potential
customers outside the U.S., which may seriously harm our business. We may need
to incur significant costs and divert resources to develop replacement
technologies or may need to adopt inferior substitute technologies to satisfy
these export restrictions. These replacement or substitute technologies may not
be the preferred security technologies of our customers, in which case our
business may not grow. In addition, we may suffer similar consequences if the
laws of any other country limit the ability of third parties to sell encryption
technologies to us.

Our certificate of incorporation and bylaws and state law contain provisions
that could discourage a takeover.

We have adopted a certificate of incorporation and bylaws, which in
addition to state law, may discourage, delay or prevent a merger or acquisition
that a stockholder may consider favorable. These provisions include the
following:



| |  |  | establishing a classified board in which only a portion of the total
board members will be elected at each annual meeting;                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | authorizing the board to issue preferred stock;                                                                                                                                       
|
| |  |  | prohibiting cumulative voting in the election of directors;                                                                                                                           
|
| |  |  | limiting the persons who may call special meetings of stockholders;                                                                                                                   
|
| |  |  | prohibiting stockholder action by written consent; and                                                                                                                                
|
| |  |  | establishing advance notice requirements for nominations for election
to the board of directors or for proposing matters that can be acted on
by stockholders at stockholder meetings.

We have adopted a certificate of incorporation that permits our board to
issue shares of preferred stock without stockholder approval, which means that
our board could issue shares with special voting rights or other provisions
that could deter a takeover. In addition to delaying or preventing an
acquisition, the issuance of a substantial number of shares of preferred stock
could adversely affect the price of our common stock and dilute existing
stockholders.

A limited number of stockholders collectively continue to own a majority of our
stock and may act, or prevent certain types of corporate actions, to the
detriment of other stockholders.

Our directors, officers and greater than 5 percent stockholders own a
majority of our outstanding common stock. Accordingly, these stockholders may,
if they act together, exercise significant influence over all matters requiring
stockholder approval, including the election of a majority of the directors and
the determination of significant corporate actions. This concentration could
also have the effect of delaying or preventing a change in control that could
otherwise be beneficial to our stockholders.




Item 3. Quantitative and Qualitative Disclosures About Market Risk.

31



---



##### Table of Contents



Foreign Currency Exchange

We transact business primarily in U.S. dollars. We are subject, however,
to adverse movements in foreign currency exchange rates in those countries
where we conduct business. To date, the effect of fluctuations in foreign
currency exchange rates on expenses has not been material. Operating expenses
incurred by our subsidiary in India are denominated in Indian rupees. This
subsidiary was formed in November 1999 to perform research and development
activities. We hold fixed-price agreements denominated in U.S. dollars with key
foreign-based suppliers: Orient Semiconductor Electronics, in Taiwan,
manufactures the Internet Location Manager; Novatel, in Canada, provides the
modem for the Internet Location Manager; Taiwan Semiconductor Manufacturing
Company, in Taiwan, manufactures our Global Positioning System receiver chips;
and Micronet, in Israel, supplies our Internet Data Terminal. Should there be a
sustained increase in average exchange rates for the local currency in any of
the foregoing countries, our suppliers may request increased pricing on any new
agreements. If this were to occur for all of these currencies and with each of
these suppliers, a 10 percent increase in average exchange rates could increase
our product costs by approximately 4 percent.

We do not use derivative financial instruments for speculative trading
purposes, nor do we currently hedge any foreign currency exposure to offset the
effects of changes in foreign exchange rates. Similarly, we do not use
financial instruments to hedge operating expenses of our subsidiary in India.




Item 4. Controls and Procedures.

Within 90 days prior to the date of this Report, the Company carried out
an evaluation, under the supervision and with the participation of the
Companys management, including the Companys principal executive officer and
principal financial officer, of the effectiveness of the Companys disclosure
controls and procedures, as defined in Rules 13a-14(c) and 15d-14(c) of the
Securities Exchange Act of 1934. Based upon that evaluation, the principal
executive officer and principal financial officer have concluded that the
Companys disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC rules and forms. It should be noted
that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and the design of our
disclosure controls and procedures may not achieve our stated goals under all
potential future conditions, regardless of how remote.

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect these internal controls
subsequent to the date of their evaluation.




PART II. OTHER INFORMATION




Item 1. Legal Proceedings.

On February 28, 2003, a purported securities class action lawsuit entitled
Liu v. Credit Suisse First Boston Corporation et al, including 166 other
parties, Civil Action Number 03-20459, was filed in the United States District
Court for the Southern District of Florida. The defendants include Credit
Suisse First Boston Corporation and related entities and persons, certain
companies that conducted an initial

32



---



##### Table of Contents



public offering of securities underwritten by Credit Suisse First Boston
Corporation, us, our Chief Executive Officer and our Chief Financial Officer.
The lawsuit was filed by an individual who purchased stock in Commerce One,
Inc. and was brought on behalf of all persons and entities who acquired stock
in the defendant companies after an initial public offering of securities
underwritten by Credit Suisse First Boston Corporation. The complaint alleges
that defendants violated various federal securities laws and state laws by
disseminating fraudulent information regarding the expected financial
performance and revenue growth of the defendant companies with the objective of
inflating those companies stock prices. The complaint seeks unspecified
damages and rescission on behalf of the purported class.

We believe we have meritorious defenses to these claims and plan to defend
the action vigorously; however, litigation is inherently uncertain and we may
not prevail in this matter.

We are also a party to other legal proceedings in the ordinary course of
business. Based on evaluation of these other matters, we believe that these
matters will not have a material effect on our results of operations or
financial position.




Item 4. Submission of Matters to a Vote of Security Holders.

None.




Item 6. Exhibits and Reports on Form 8-K.

(a)  Exhibits

|     |  |                                              
|---- |  | ---------------------------------------------
|99.1 |  | Statement pursuant to 18 U.S.C. Section 1350.
|99.2 |  | Statement pursuant to 18 U.S.C. Section 1350.

(b)  The Company filed the following reports on Form 8-K during the three months
ended March 31, 2003:



| |  |  | A current report on Form 8-K was filed on February 4, 2003 pursuant
to Item 5 (Other Events and Regulation FD Disclosure) and Item 7
(Financial Statements, Pro FormaFinancial Information and Exhibits). 
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | A current report on Form 8-K was filed on February 11, 2003 pursuant
to Item 5 (Other Events and Regulation FD Disclosure) and Item 7
(Financial Statements, Pro FormaFinancial Information and Exhibits).
|
| |  |  | A current report on Form 8-K was filed on March 7, 2003 pursuant to
Item 5 (Other Events and Regulation FD Disclosure) and Item 7 (Financial
Statements, Pro FormaFinancial Information and Exhibits).    
|
| |  |  | A current report on Form 8-K was filed on March 20, 2003 pursuant to
Item 5 (Other Events and Regulation FD Disclosure) and Item 7 (Financial
Statements, Pro FormaFinancial Information and Exhibits).   

33



---



##### Table of Contents





| |  |  | A current report on Form 8-K was filed on March 25, 2003 pursuant to
Item 5 (Other Events and Regulation FD Disclosure) and Item 7 (Financial
Statements, Pro FormaFinancial Information and Exhibits).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

34



---



##### Table of Contents



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| | AT ROAD, INC.
| | -------------



| | By: /s/ Thomas C. Hoster
Thomas C. Hoster
Chief Financial Officer
(Principal Financial and Accounting Officer)
| | --------------------------------------------------------------------------------------------------------------

Date: May 14, 2003

35



---



##### Table of Contents



CERTIFICATIONS

I, Krish Panu, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of At Road, Inc.;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

/s/ Krish Panu
Krish Panu
Chief Executive Officer

36



---



##### Table of Contents



CERTIFICATIONS

I, Thomas C. Hoster, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of At Road, Inc.;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

/s/ Thomas C. Hoster
Thomas C. Hoster
Chief Financial Officer

37



---



##### Table of Contents



Exhibit Index

|            |  |                                             
|----------- |  | --------------------------------------------
|Exhibit No. |  | Description of Exhibit                      
|            |  |                                             
|99.1        |  | Statement pursuant to 18 U.S.C. Section 1350
|           
|99.2        |  | Statement pursuant to 18 U.S.C. Section 1350

38